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A perfectly price-discriminating monopolist results into.
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Answer to Problem 7MCQ
(d) Achieve
Explanation of Solution
Allocative efficiency can be achieved in a perfectly price-discriminating monopolist because all potential customers who are willing to buy the good at a price equal to or above marginal cost are able to do so and eliminate inefficiency. Hence, option (d) is correct.
Perfect
Since, a perfectly price-discriminating monopolist extracts all consumer surplus to earn a supernormal profit, hence option (b) is incorrect.
Since there is allocative efficiency in a perfectly price-discriminating monopolist so there will not be a
In a single price
When a monopolist charges a different price to different groups of consumers to their maximum willingness to pay then it is called perfect price discrimination. In perfect price discrimination, monopolists extract all consumer surplus. Perfect price discrimination does not cause any allocative inefficiency.
Chapter 63 Solutions
Krugman's Economics For The Ap® Course
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